In the Region US Airways lowers redemption value of...

BUSINESS DIGEST

August 28, 2002

In the Region

US Airways lowers redemption value of nonrefundable fares

US Airways Group Inc., flying under bankruptcy protection, moved yesterday to increase its revenue by making cheap, nonrefundable tickets lose their value when travelers miss their flights and try to redeem the tickets later.

The change means the No. 7 U.S. carrier no longer lets holders of nonrefundable tickets fly standby. The new rule, which takes effect immediately, applies mostly to business travelers who don't make their flights, knowing they can get credit for the ticket later.

Joining other major airlines, US Airways also said it will charge $25 - a $15 increase - if a passenger wants to use a paper ticket when an electronic ticket could have been used.

Carriers including Northwest Airlines Corp. and Continental Airlines Inc. charge fees to issue paper tickets as airlines try to stem losses totaling a record $7.3 billion last year and more than $3.8 billion in this year's first half. Corporate travel slid during the recession, and vacation travelers who have filled planes since the terrorist attacks of Sept. 11 refuse to pay higher fares.

Timonium's Grotech leads funding for N.C. company

Grotech Capital Group, a venture capital fund based in Timonium, has led a $45 million round of funding for a North Carolina maker of telecommunications equipment.

Hatteras Networks said yesterday that the financing increased total capital investment in the company to more than $73 million. The 2-year-old privately held company, based in Research Triangle Park, develops software and hardware to enable high-speed Ethernet broadband connections over the "last mile" of telecommunications networks.

Elsewhere

It's end of the line for Sony's Betamax video machines

Sony will stop manufacturing Betamax machines by year's end as the company refocuses its efforts on DVD and other technologies dominating the market, Sony spokeswoman Shoko Yanagizawa said.

The announcement marks the end of a 27-year run during which the brand sold 18 million units worldwide in a race against VHS technology from its archrival Victor Co., also known as JVC, to set the video format standard.

Betamax was first to market, hitting stores in 1975, and had global sales of 2.3 million units in 1984. But Sony's decision not to share its technology with rival companies proved to be fatal. Underdog VHS - short for "video home system" - took control of the market by the mid-1980s.

More than 6,000 apply for 150 Weirton Steel jobs

Weirton Steel Corp.'s effort two weeks ago to fill about 150 laborer and entry-level positions attracted more than 6,000 applicants.

The Weirton, W.Va., company said the applications came from job seekers as far away as Colorado and Wyoming. A higher than expected number of retirements prompted the rare hiring.

Weirton Steel President and Chief Executive Officer John Walker said yesterday that he was not surprised by the response. The jobs pay nearly $13 an hour.

He also said the deluge of applications shows that the U.S. steel industry's financial struggles are not over, despite tariffs imposed by President Bush in March on imported steel.

Boeing offers increase in pension to Machinists

Boeing delivered its "best and final" offer to the Machinists union yesterday, calling for a 20 percent pension increase by the contract's third year, a boost in the ratification bonus to 8 percent of a year's pay. The union said it was unsatisfactory.

The pension proposal would boost monthly payments from the current $50 per year of service to $60 over the life of the contract, increase wages up to 2.5 percent in subsequent years after the bonus in the first year and delay an increase in the employee share of health-insurance premium costs until 2004.

A union spokesman said the Machinists asked Boeing to extend the contract day to day while negotiations continue, but the company had not responded.

Navistar cuts to translate into about 1,100 layoffs

Navistar International Corp. said yesterday that the round of job cuts it detailed this month will result in about 1,100 layoffs over the next several weeks, with more planned by year's end.

The biggest cutbacks will be at its International Truck and Engine Corp. operations in Springfield, Ohio, where Navistar said most of the 750 to 800 recently announced layoffs will take effect Sept. 6. The Springfield cuts result from Navistar's decision to end production of heavy-duty trucks in the western Ohio city, reflecting continuing weak demand for new trucks.

Navistar also is laying off about 315 production employees from its Indianapolis engine plant effective Sept. 27.

Oxygen Media to cut two-thirds of Web staff

Oxygen Media said yesterday that it is laying off nearly two-thirds of the staff at its oxygen.com Web site and is scaling back the site's content because of difficult business conditions.